Remote working simplifications with Germany due to COVID-19 set to expire

The Austrian Consultation Agreement with Germany contains special rules concerning the application of the double taxation treaty, which were introduced due to the pandemic. Accordingly, employers that are resident in Germany would not be deemed to have created a permanent establishment (“PE”) in Austria if an employee who is resident in Austria works from a home office as a measure to combat the COVID-19 pandemic.

This COVID-19 simplification for homeworking due to the pandemic may currently be applied to working days since 11 March 2020. Alongside other Covid-prevention measures that are set to expire, the simplifications in relation to the application of the double taxation treaty with Germany will only apply until 30 June 2022. From the expiry of the special rules on 30 June 2022 at the latest, companies that are resident in Germany will face a stricter approach from the Austrian Ministry of Finance (BMF) concerning the creation of a home office PE in Austria.